[2015] KEELRC 484 (KLR)

REPUBLIC OF KENYA

IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT NAIROBI

CAUSE NO 975 OF 2012

JOHN KAMAU MBURU............................................................................................................CLAIMANT

VERSUS

PROGRAM FOR APPROPRIATE TECHNOLOGYIN HEALTH (PATH).......................1ST RESPONDENT

SOCIETY FOR WOMEN AND AIDS IN KENYA (SWAK)...............................................2ND RESPONDENT

AWARD

Introduction

1. The Claimant, John Kamau Mburu has sued Program for Appropriate Technology in Health (PATH) as the 1st Respondent and Society for Women and Aids in Kenya (SWAK) as the 2nd Respondent. An employment relationship between the Claimant and the 2nd Respondent is admitted but is denied as far as the 1st Respondent is concerned.

2. The Claimant's claim is contained in a Memorandum of Claim as amended on 5th August 2014. The 1st Respondent filed an amended Memorandum of Defence on 12th September 2014 and the 2nd Respondent filed a Memorandum of Defence on 25th June 2012 and a further response on 29th September 2014.

The Claimant's Case

3. The Claimant states that the 1st and 2nd Respondents were joint partners in a program known as AIDS Population and Health Integrated Assistance in Western Kenya (APHIA II) with the 1st Respondent as the lead partner.

4. The Claimant's entry into the 2nd Respondent's service was by a consultancy agreement dated 21st July 2008. Under this contract the Claimant was to review income and expenditure for the project and produce financial reports for the 2nd Respondent. The Claimant's consultancy engagement was for 40 days at a daily rate of Kshs.10,000. 00 subject to 5% withholding tax. According to the Claimant, the work assigned to him could not be completed in 40 days and he eventually worked for 54 days. The Claimant claims that he was paid only Kshs.38,000. 00 on account of this consultancy.

5. The Claimant goes to state that on 2nd May 2009, he entered into an employment contract with the 1st and 2nd Respondents. He produced an agreement setting out his terms of employment as follows:

The employment was to run for a period of 5 years from 2nd May 2009 to 31st May 2014;

The Claimant was to be paid a basic salary of Kshs.210,249. 00 and allowances totaling Kshs.500,000. 00 net of tax;

The Claimant was to be paid a gratuity based on 30% of the monthly basic salary plus allowances for the period of the contract;

The Claimant was entitled to annual leave of 21 days per annum;

The Claimant was entitled to comprehensive medical cover at Kshs.35,000. 00 per month for the entire period of the contract.

6. The Claimant avers that the 1st and 2nd Respondents have withheld Kshs.1,800,685. 00 in allowances and Kshs.1,338,202. 00 in gratuity payments. He further states that he did not go on leave during the entire period of his employment and he was denied paternity leave in the year 2009.

7. According to the Claimant, his employment was terminated by letter dated 24th September 2009 following his arrest and arraignment at Kibera Law Courts in Criminal Case No 4305 of 2009. The Claimant was convicted of the charges of making a document without authority contrary to Section 357(a) of the Penal Code and uttering a false document with intent to defraud contrary to Section 357(b) of the Penal Code. He told the Court that he had appealed against the conviction and sentence.

8. The Claimant's claim is as follows:

a) A declaration that the termination of his employment contract was unjustifiable, unlawful and unfair;

b) Salary arrears (360,137*5 month deduction)............Kshs.1,800,685. 00

c) Consultancy fee balance (discounted)........................Kshs.400,000. 00

d) Motor vehicle hire charges..................................Kshs.50,613. 00. 00

e) Gratuity...........................................................Kshs.1,338,202. 00

f) Paternity leave.....................................................Kshs.588,340. 00

g) Special damages for breach of contract as:

i) Basic salary (210,249*56).........................Kshs.11,773,944. 00

ii) Allowances (500,000*56)..........................Kshs.28,000,000. 00

iii) Medical cover (35,000*56)..........................Kshs.1,960,000. 00

iv) Gratuity (30% of 210,249+500,000)*56. ........Kshs.10,252,183. 00

v) Annual leave for the contract period (21*5*610,249)/2*26 ................................Kshs.2,464,467. 00

h) Exemplary damages............................................Kshs.5,000,000. 00

i) Defamation...................................................Kshs.5,000,000. 00. 00

j) 12 months' compensation for unfair termination.......Kshs.7,322,988. 00

k) 3 months' notice (610,249*3)...............................Kshs.1,830,747. 00

l) Aggravated damages...........................................Kshs.5,000,000. 00

m) Certificate of service

n) Costs and interest

The 1st Respondent's Case

9. In its amended Memorandum of Defence filed on 12th September 2014, the 1st Respondent states that it had no contractual relationship with the Claimant either as an employer or otherwise and that the Claimant was aware that he was an employee of the 2nd Respondent. The 1st Respondent further states that the Claimant's claim is founded on fraud and the documents annexed to the Memorandum of Claim are forgeries.

10. The 1st Respondent goes on to state that on 19th December 2006, it entered into a sub-agreement with the 2nd Respondent by which the 2nd Respondent became the 1st Respondent's implementing partner for a project known as 'APHIA II'. Under the sub-agreement, which was to run for a period of five (5) years, the 1st Respondent was obliged to meet the costs of the project, including the cost of the 2nd Respondent's employees, equipment, supplies and other project work.

11. Sometime in September 2008, the 1st Respondent advertised for the position of Finance Officer on behalf of the 2nd Respondent. The 1st Respondent also participated in the subsequent interviews and made recommendations on the ideal candidate for the position. According to the 1st Respondent, it had no further interaction with the Claimant who was recruited for the position. It is the 1st Respondent's position that it is a stranger to the consultancy and employment contracts between the Claimant and the 2nd Respondent. In addition, the 1st Respondent states that the employment contract, payslips, termination letter and business card annexed to the Memorandum of Claim are forgeries.

The 2nd Respondent's Case

12. In its Memorandum of Defence filed on 25th June 2012, the 2nd Respondent denies knowledge of the consultancy agreement marked 'JKM-1' stating that the legitimate consultancy agreement between itself and the Claimant was for a period of 4 days, for which the Claimant was fully paid.

13. The 2nd Respondent further denies knowledge of the employment contract annexed to the Memorandum of Claim adding that the Claimant had been engaged on an annual renewable contract at a monthly salary of Kshs. 60,000. The contract was not renewed due to gross misconduct on the Claimant's part and this was duly communicated by letter dated 1st October 2009.

14. With regard to the claim for paternity leave, the 2nd Respondent states that the Claimant had taken 7 days and opted to forfeit the balance of 7 days.

Findings and Determination

15. The following are the issues for determination by the Court:

a) Whether there was an employment relationship between the Claimant and the 1st Respondent;

b) The extent of the jurisdiction of the Court to determine the Claimant's claim;

c) Whether the employment contract dated 2nd May 2009 and letters dated 28th August 2009 & 24th September 2009 produced by the Claimant are authentic and admissible before the Court;

d) Whether the Claimant has made out a case for unjustifiable and unfair termination of employment;

e) Whether the Claimant is entitled to the remedies sought.

Employment Relationship Between the Claimant and the 1st Respondent?

16. The Claimant pleads that he was employed by the 1st and 2nd Respondents jointly. The 1st Respondent denies this averment and states that it had no employment relationship with the Claimant.

17. Employment claims coming before this Court must be premised on an employment relationship capable of enforcement.

18. Section 2 of the Employment Act, 2007 defines an employee as:

“a person employed for wages or a salary and includes an apprentice and indentured learner”.

19. The same section defines an employer as:

“any person, public body, firm, corporation or company who or which has entered into a contract of service to employ any individual”

20. A contract of service is defined as:

“an agreement, whether oral or in writing, and whether expressed or implied, to employ or serve as an employee for a period of time, and includes a contract of apprenticeship and indentured learnership”

21. An employment relationship is not the same as a work relationship. In other words, the mere fact that parties work together does not necessarily give rise to an employment relationship. In Ontario Ltd v Sagaz Industries Inc. 2001 SCC 59the Supreme Court of Canada held that in determining whether an employment relationship actually exists, the Court must examine the total relationship between the parties.

22. Traditionally under common law, control of the employee under the employer's chain of command and integration of the work performed by the employee into the core business of the employer were used as litmus tests to determine the existence of an employment relationship.

23. Times have however changed and the work place has evolved meaning that these tests are no longer conclusive (see Kimondo J in Everret Aviation Limited Vs the Kenya Revenue Authority [2013]eKLR ). The Court must now examine the intention of the parties not only as expressed in the documents of engagement but as evidenced in the fundamental behaviour of the parties as well.

24. The Claimant's claim to an employment relationship with the 1st Respondent arises from the level of control exercised by the 1st Respondent over the work performed by the Claimant. It is not in dispute that the 1st Respondent was directly involved in the recruitment of the Claimant to the position of Finance Officer at the 2nd Respondent. It is also admitted that the Claimant maintained significant official interaction with officers of the 1st Respondent.

25. An examination of the operational relationship between the 1st and 2nd Respondents is however important. According to the evidence adduced before the Court the two organisations were part of a consortium involved in the execution of a project known as 'APHIA II' which was funded by United States Agency for International Development (USAID). The 1st Respondent was the lead partner in the consortium. Under the relevant sub-agreement, the 1st Respondent was responsible for paying for project costs incurred by the 2nd Respondent. These costs, which included employee expenses, were paid on reimbursement basis.

26. This is not an unusual arrangement in the non governmental sector where a foreign donor (known as a back donor) gives funds to a local organisation (known as a lead partner) to fund activities undertaken by another local organisation (known as an implementing partner). In order to aid successful implementation of the project, the lead partner may offer technical support to the implementing partner, including recruitment of key project staff. The organisations involved in such an arrangement however maintain their autonomy and carry their respective internal responsibilities. In my understanding, this was the arrangement between the 1st and 2nd Respondents and the Claimant, who was recruited as an employee of the 2nd Respondent remained as such.

27. Given his role in the project, the Claimant had a close work relationship with the 1st Respondent but this did not give rise to an employment relationship. The question whether there was an employment relationship between the Claimant and the 1st Respondent must therefore be answered in the negative, the effect being that the Claimant's claim against the 1st Respondent is dismissed in its entirety.

The Jurisdiction of the Court to Determine the Claimant's Claim

28. Part of the Claimant's claim arises from a consultancy agreement dated 21st July 2008 between the Claimant and the 2nd Respondent. The question for determination on this score is whether the Court has jurisdiction to entertain claims arising from the consultancy agreement.

29. The jurisdiction of this Court is anchored in Article 162(2)(a) of the Constitution which provides as follows:

(162)(2) Parliament shall establish courts with the status of the High Court to hear and determine disputes relating to-

(a) employment and labour relations and

(b)...........................................................

30. Pursuant to this constitutional provision, Section 12 (1) (a) the Employment and Labour Relations Court Act provides that:

12(1) The Court shall have exclusive original and appellate jurisdiction to hear and determine all disputes referred to it in accordance with Article 162(2) of the Constitution andthe provisions of this Act or any other written law which extends jurisdiction to the Courtrelating to employment and labourrelations including—

(a) disputes relating to or arising out of employment between an employer and an employee;

(b) ..............................................................................................;

31. My reading of these provisions is that the jurisdiction of the Employment and Labour Relations Court in as far as employment matters are concerned is premised on the existence of an employment relationship as defined in law. This jurisdiction is thus limited and the Court has no leeway to entertain claims arising from a consultancy agreement such as the one produced by the Claimant. The claims arising from the agreement dated 1st July 2008 therefore fail and are dismissed.

32. The Claimant also claims damages for defamation and the Respondents have challenged the jurisdiction of the Court to deal with this claim. The Court has settled this question in Wilberforce Ojiambo Oundo v Regent Management [2013] eKLRby holding that Section 12(1) of the Employment and Labour Relations Court Act extends jurisdiction to all matters emanating from an employment relationship. It follows therefore that if an employer were to defame an employee within an employment environment, a claim for defamation would lie in this Court.

33. In the instant case, the alleged defamatory words are contained in a termination letter dated 24th September 2009, whose authenticity is contested by the Respondents and the Court will now proceed to rule on this point.

Authenticity of Documents

34. At an early stage of this trial the 2nd Respondent took issue with the authenticity of the following documents:

a) Employment contract dated 2nd May 2009 (DEXH5);

b) Letter dated 28th August 2009 allegedly signed by the 2nd Respondent's National Chairperson, Prof. Elizabeth Ngugi, now deceased (DEXH10);

c) Letter dated 24th September 2009 allegedly signed by Prof. Ngugi (DEXH12).

35. Miss Kareithi for the 2nd Respondent submitted that these documents were forgeries and the Court therefore referred them to a Forensic Document Examiner for verification. Prof. Ngugi appeared before the Deputy Registrar of this Court on 13th June 2013 when her specimen signature was taken.

36. The Forensic Document Examiner's report dated 20th June 2013 returned the following finding:

“I have today examined and compared the signatures pointed by pencil on exhibits marked DEX-5, DEXH-10, DEXH-12 and the specimen signatures on S-1;

In my opinion the signatures were NOT made by the same author.”

37. The Claimant disagreed with the Forensic Document Examiner's report and in the final submissions filed on his behalf, his Counsel took issue with the fact that the Forensic Document Examiner was not called for cross examination.

38. Proceedings in this Court rely heavily on documents filed by the parties and where the authenticity of a document is challenged, the Court is at liberty to call for expert opinion on the matter. In the South African case of Schneider NO and Others v AA and Another 2010 (5) SA 203 (WCC), it was held that in scrutinising expert opinion, the Court is called upon to consider the qualifications of the expert.

39. The report before the Court was prepared by a Forensic Document Examiner by the name Chania Geoffrey M(C.I). In the statement of qualification, he states that he is a qualified forensic document examiner with five years experience working with the Criminal Investigation Department of Kenya Police.

40. Neither the statement of qualification nor the findings of the Forensic Document Examiner was challenged in evidence and the Court has no basis to reject the Forensic Document Examiner's opinion. I must add that in assessing evidence, this Court is guided by the balance of probability standard of proof.

41. In view of the foregoing, the Court adopts the report by Chania Geoffrey M (C.I) that the following documents were not signed by Prof. Elizabeth Ngugi:

a) Employment contract dated 2nd May 2009 (DEXH5);

b) Letter dated 28th August 2009 (DEXH10);

c) Letter dated 24th September 2009 (DEXH12).

42. Sadly, by the time of concluding this case, Prof. Ngugi had passed away and the Court missed the opportunity to hear her viva voce. There is however adequate documentary evidence that the late Professor had disowned the signatures appearing on these documents.

43. That said, the Court rejects the aforesaid documents and proceeds to dismiss all claims based thereon.

Claims for Unfair Termination and Defamation

44. The Claimant's claims for unfair termination and defamation are based on the employment contract dated 2nd May 2009 and the termination letter dated 24th September 2009 which the Court has rejected on grounds of non authenticity.

45. The 2nd Respondent produced the Claimant's employment contract dated 3rd November 2008 running from even date to 30th September 2009. A letter dated 1st October 2009 indicating non-renewal of the contract was also produced. It seems to me therefore that the Claimant served his full contract and a claim for unfair termination does not lie. A similar fate befalls the claims for notice pay and damages for breach of contract. The claim for motor vehicle hire expenses was not proved and is dismissed.

46. As regards the claim for defamation, the only thing to say is that since the subject of the alleged defamatory words being termination letter dated 24th September 2009, was not admitted in evidence, this claim collapses.

Remedies

47. In view of the foregoing findings and conclusions, the only claims pending determination are for gratuity, annual leave and paternity leave. According to the Claimant's employment contract dated 3rd November 2008, he was entitled to gratuity at the rate of 15% of basic salary payable at the end of the contract. In the absence of any evidence of settlement of this entitlement, the claim succeeds and is allowed.

48. The Claimant was also entitled to 21 days' annual leave and 14 days' paternity leave. He testified that he did not take any annual leave and the 2nd Respondent did not produce any leave records to counter this evidence. I will therefore allow leave pay on prorata basis. The 2nd Respondent stated that the Claimant had taken 7 days' paternity leave. The claim for the balance of 7 days was therefore admitted and is allowed. In tabulating these claims, the Court adopts the monthly salary figure of Kshs.64,800. 00 as stated in the employment contract dated 3rd November 2009.

49. Finally, I make an award against the 2nd Respondent and in favour of the Claimant in the following terms:

a) Gratuity (Kshs.64,800x15/100x11 months).......Kshs.106,920. 00. 00

b) Prorata leave (Kshs.64,800/30x1. 75x11 months).....Kshs.41,580. 00

c) Paternity leave (Kshs.64,800/30x7 days)...............Kshs.15,120. 00

Total.................................................................Kshs.163,620. 00

50. The award amount which is subject to statutory deductions shall attract interest at court rates from the date of the award until payment in full. I further direct the 2nd Respondent to issue the Claimant with a certificate of service.

51. Each party will bear their own costs.

52. Orders accordingly.

DATED SIGNED AND DELIVERED IN OPEN COURT AT NAIROBI THIS 30TH DAY OF SEPTEMBER 2015

LINNET NDOLO

JUDGE

Appearance:

Mr. Ouma for the Claimant

Miss Aluvale for the 1st Respondent

Mr. Ngugi for the 2nd Respondent